Employee Retirement Income Security
Act
The Employee Retirement Income Secur-
ity Act of 1974 (ERISA) (Pub.L. 93-406,
88 Stat. 829, enacted September 2, 1974) is
an American federal statute that establishes
minimum standards for pension plans in
private industry and provides for extensive
rules on the federal income tax effects of
transactions associated with employee bene-
fit plans. ERISA was enacted to protect the
interests of employee benefit plan parti-
cipants and their beneficiaries by requiring
the disclosure to them of financial and other
information concerning the plan; by estab-
lishing standards of conduct for plan fiduciar-
ies; and by providing for appropriate remed-
ies and access to the federal courts.
ERISA is sometimes used to refer to the
full body of laws regulating employee benefit
plans, which are found mainly in the Internal
Revenue Code and ERISA itself.
Responsibility for the interpretation and
enforcement of ERISA is divided among the
Department of Labor, the Department of the
Treasury (particularly the Internal Revenue
Service), and the Pension Benefit Guaranty
Corporation.
History
The history of ERISA can be said to have be-
gun in 1961 when President John F. Kennedy
created the President’s Committee on Cor-
porate Pension Plans. The movement for pen-
sion reform gained some momentum when
the Studebaker Corporation, an automobile
manufacturer, closed its plant in 1963; the
pension plan was so poorly funded that
Studebaker could not afford to provide all
employees with their pensions. The company
created three groups. Group 1 consisted of
3,600 workers who reached the retirement
age of 60. They got full pension benefits.
Group 2 consisted of 4,000 workers, aged
40-59, who had ten years with Studebaker.
They got lump sum payments that roughly
equated to 15% of the actuarial value of their
pension benefits. Group 3 was a residual
group of 2,900 workers with no vested pen-
sion rights. They got nothing.
In 1967, Senator Jacob Javits proposed le-
gislation that would address the funding,
ve